Member Info for Daisan

Ah, yes. That is annoying. I tried the same with the same result. The game has ever been difficult for the private investor. To look at it another way, they found it very easy indeed to raise $14m and you would hope that this was sufficient to see them through to positive cash flow. If they can finally get the VAT back that should boost enormously the exploration and development efforts. On the negative side, these surprise placements tend to put investors off.

RetiredBanker, You may be right but what do you believe are thee nefarious means?

Jollyspeculator, I tend to only use NPVs for explorers. Once you are producing the discount to NPV should have closed substantially. So, for an explorer I expect the market capitalisation attributable to be no more than 20% at PFS. But as they go through BFS and development that gap should close. Of course, in the process of development a lot of that closing is likely to be through capital raisings. You should bear in mind that the NPV for New Luika excludes a lot of the resources in the area and only accounts for 500k oz. There is twice as much resource outside the mine plan as in it. Also, the NPV for New Luika does not include Singida obviously which has a similar resource to that outside of New Luika's mine plan. Add in the new acquisition, which adds another similar amount as well as further upside prospectively, and we are looking at the mine plan covering 20% of the resources by my calculations (correct me if I am wrong). Personally I have targeted gold miners because I believe that the case for gold is compelling again. So I am of the opinion that gold will rise in the next few years. But at 85k oz per year, $1200/oz, $700/oz cash costs (they are lower but let's be conservative) and without capital expenditure, Shanta should be increasing their cash position by $42.5m cash per year. I believe that gold will be north of $1500/oz next year and higher the year after so this should translate directly into higher cash generation. Of course, there will always be capital expenditure and I see Singida requiring significant amounts in the next few years but that will add to the annual production. The valuation for Shanta remains depressed as a lot have bailed on the back of the VAT issues, the risk to moving underground and the commensurate reduction in output, the cautiousness in general towards gold miners, etc. I do not agree with this assessment. Yes, of course there is risk here but the risk/reward is favourable and Shanta should see a rising production profile whilst enjoying a rising gold price over the next few years.

I would point out that the two positives about the participants in the placing are Odey and the FD. Odey from the point of view that this decreases the fear that they are selling down. The FD from the point of view that they tend to be the most conservative and the ones with the firmest grasp on financial reality. In my experience they tend to only buy when the risk/reward is very skewed in their​ favour.

Visitor, Apologies for my tardy response. I have been without internet for 2 days now (thanks Virginia Media) and am piggybacking my kind neighbours currently which is only just accessible! I agree that we need more clarity on what specifically the funds are to be spent on but cash flow must be tighter than comfortable without the VAT refund. It cannot be assumed that this is going to come in at a specified date so alternatives have to be arranged and a couple of million was clearly cutting it too fine for them. Bear in mind that this is likely to be their weakest quarter of the year. It is regrettable without a doubt and with hindsight I would have reduced my holding but I was unaware of the VAT issue until the share price had already fallen substantially. Without clarification we can only assume that work at Singida will recommence. After all, they have substantially more funding available now with the debt reschedule and capital raise than they otherwise would have before the VAT debacle resulted in the pilot being halted. I would like to see Singida recommence as it is as significant potentially as New Luika and paves the way to a mid-tier producer. Speaking of which, the acquisition also supports the movement towards mid-tier and I expect this to support both a mine life extension and an increase in production profiles.

Visitor, Whilst I agree with that, it is likely that the placing has been stimulated by VAT issue. I confess that this was a concern. Bad timing to withhold the VAT when we are in the middle of a large capital programme. It will be interesting to see at what price the placing is agreed. On the positive side, the new acquisition looks very good, the new funding arrangements (debt plus placing) should result in funds to progress other assets (Singida which was put on hold) and Odey are participating in the fund raise which removes that threat. Interesting that employees are undertaking a salary sacrifice. Given the funding (this should give them access to $30m+) this is not a necessary action. Inevitably the market will react negatively due to the placing but we need to wait and see what the outcome (price/subscription level) before making a definitive judgement.

Ever the way with these companies! Good or bad mid-July will be the next key time.

This link is more appropriate: http://interfax.az/view/705958 However, I think that we have reached the point where this is no longer useful as it is including production from Chovdar. Otherwise AAZ produced way more gold than anticipated! If I am reading this correctly it would suggest that they produced 44k oz in May which is, frankly, impossible and would suggest that all of Chovdar's production has been included in one hit. Even so that seems very high so I confess I am confused! Going to have to wait until the quarterly production report comes out I'm afraid.

The new appointment looks excellent. Anyone who was the president of Oyu Tolgoi has got to be respected.

Sentimentalist, Two of my favourites as well. I am currently out of AAZ as I was concerned about their grade issues which were never really explained but which they are seeking to get around in what is still a somewhat risky manner so there are possibilities that they could disappoint this year. At some stage though it could be a very good investment. Shanta is my favourite option. Continues to deliver although risks remain with moving underground and the VAT issue is annoying. If they continue to deliver they will be throwing off an awful lot of cash as capital expenditure reduces. I have to confess that I would prefer Shanta to continue developing Singida once the underground operations at New Luika are stabilised but I could certainly see a situation where development is reigned back a little to allow cash resources to improve.

Patryk221, I don't see that much has changed for several months here. The movement underground continues apace, on budget. If anything we are ahead of anticipated position based on production. The one unexpected factor is the withholding of VAT which is annoying but which I am sure will be sorted out eventually (I can't imagine it won't as this would seriously undermine Tanzania as an investment destination). Sentiment towards gold miners is poor at the moment despite the relatively strong performance of gold. No idea why but you can only go by what you believe and I believe that gold in the medium to long term will be very strong. Shanta is a company that has a history of delivering so for me it is one of my preferred investment options in the sector.

Well, you could potentially read into it that he is on his way out but I confess that has little other evidence to back it up. It was an off market transaction according to the news. Of perhaps more interest is the fact that members of the concert party actually sold some. It's becoming a bit like Eastenders here with sub-plots galore. It doesn't change much as I still expect them to buy up to their allowable limit but they are moving the chairs around. One of the weirdest situations on the market.

The market reaction seems a bit like a shrug of the shoulders to me. This is AIM and you would expect something more than the odd 10%. Does this indicate that the expectation is that this will fail? Or perhaps that people just don't care.

Some shareholder activism at CGNR. The PJ circus is coming to town and it looks like he has the support of the major shareholder (who has over 27%). I don't particularly rate PJ but you have to say that GH has reinvigorated GGP (even if they haven't actually found anything there yet). Whilst directors hold almost 30% of the company, I suspect that there will be some considerable support amongst the other investors so it could well succeed. Whether it will change anything is debatable but it will be interesting to see the impact on the share price.

Looks like it may be a double top. Not pushing through the April highs suggests we may well see a reasonably substantial pull back. Actually, that is not as bad as it sounds. The likelihood was always that we would see the second half of the year form a low and a rebound. The big move is still on the agenda but in the meantime it might be worth battening down the hatches for gold producers. May's production numbers next up here and it will be good to see whether they have managed to stabilise them.

A pretty clear head and shoulders pattern formed on the chart (for those that follow such things) with the price breaking the neckline.

comeonvog, Agreed. Progress on recovering the $12m VAT rebate would be good to hear and would accelerate development at Singida.

It looks like good progress at Bauhinia Creek and development ahead of plan at Luika. Tellingly Toby Bradbury has stated "gold production in Q2 is running ahead of expectations". Shanta consistently over deliver and it looks like that is going to continue.

Very large buys for CGH. How the hell did they manage to get their hands on so many shares?

NicotineNelly, Possibly but timing is always the difficult thing. I tend to look at the next few years as being very positive for gold. If it starts this summer then great! Otherwise, I am content to wait and pick up more gold miners. I was hoping that this would drop to my buy price but it doesn't look like it is going to get there.